Jean-Philippe Lemay last week became CEO of Fiera Capital, succeeding founder Jean-Guy Desjardins, executive chairman of the board, who handed over to him the reins of the independent management firm which oversees assets of more than 180 billion. The new CEO intends to pursue the group’s organic growth strategy, which will be based mainly on business development in the United States, Canada and Eurasia as well as on private management which, according to him, ensures an additional quality to the investor portfolio.
Q. Since 2020 you have been Global President and COO of Fiera Capital, but you are not a newcomer. How did you get involved with the firm?
R. In January 2010, I was hired by Natcan, the management firm of the National Bank, to implement the management strategy for the pension plans. We were starting from zero. I had an actuarial background and a master’s degree in financial mathematics.
When Jean-Guy Desjardins acquired Natcan in April 2012, I took on the leadership of this division at Fiera, which managed assets of 2.5 billion. I managed it until 2016 and our assets totaled 12 billion when I was asked to become chief investment officer of the Canadian platform.
In the meantime, in 2015, I started a doctorate in finance which I had to interrupt since in 2017, I took the presidency of Canadian activities until 2020, where I was appointed world president and chief operations, responsible for public procurement, distribution, resources and technology.
Jean-Guy Desjardins supervised everything and was responsible for private markets, finance and legal affairs. There, I take over all the functions of Jean-Guy and I report to the board of directors and to him, the executive chairman of the board.
Q. You are now the CEO of a firm that manages $ 180 billion in assets and aspired to join the rankings of the world’s top 100 asset managers. Is that still the goal?
R. Yes, we want to continue to grow, but we have reduced our progress somewhat following a new strategic orientation which has led us to divest ourselves of certain divisions in the United States. In the past year and a half, we have sold three American divisions that no longer fit into our plan. This totaled some $ 15 billion. We are going to redeploy our capital to be more aligned with our strategy.
Q. Will this change your strategy to increase your presence in the United States and Asia?
R. Not at all. The United States remains our biggest driver of growth, but we have decided to specialize in the institutional market and that of financial intermediaries. We abandoned our private wealth management division to focus on the institutional and intermediary market.
We put a lot of emphasis on private banking, which is the heart of our strategy, and this is done in two parts: we invest the assets of our clients all over the world and we will also seek new clients elsewhere in the world, mainly in the United States, Canada, Europe and Asia.
Q. How are your assets under management geographically segmented?
R. We have about $ 100 billion in assets in Canada, $ 55 billion in the United States and the rest in Europe and Asia. The growth to come will be done organically by working on the best investment platform.
We are banking on the commercial potential of this platform with institutional investors and financial intermediaries who are becoming increasingly important in the United States. The same is done in Europe and Asia.
Q. The private management offered by Fiera is becoming increasingly important. Is it the demand that is strong from your customers?
R. We can see that we have real momentum in private management. In the space of three years, our assets under management doubled to 15 billion. The same is expected for the next three years.
Whether in commercial real estate, infrastructure, agriculture, private equity, our teams are seasoned. Demand is strong from institutional investors who are willing to pay more to add quality to their portfolio.
Q. However, private banking requires more resources and involves higher operating costs, right?
R. Yes, it’s true. Buying a commercial building, evaluating it and managing it costs more than buying 1000 shares of Google. At Fiera, private management fees are estimated to be around 1%, compared to 0.38% for portfolio management fees in the market.
But, more and more, private management can represent 30 to 40% of a portfolio. Our teams do everything.
Q. It seems to me that Fiera Capital is less vocal than other large asset managers who now swear by ESG investing and carbon neutrality. Is this a concern for you?
R. If you are telling me, it is because we will have to work on this and make it better known because responsible investment is at the heart of our investment strategies. We have exclusive type portfolios with very clear investment policies, we work according to the needs and requests of our clients.
This is done organically, at the level of each of our strategies and each of our investment units. We still have portfolios that are invested in fossil fuels when investors still want to be there. We evolve with our customers.
Q. What are your priorities going to be for the next five years?
R. We want to continue our organic growth and, to achieve this, we plan to increase our distribution resources in the United States and Eurasia. And as you pointed out, private banking requires more resources and here too, we plan to increase our teams to respond to growth.